On September 14, 2026, Governor Greg Abbott directed the Texas Water Development Board (TWDB) to enforce water use reporting requirements against data centers and other major water users that have failed to report their water consumption to the state. The Governor's letter directs the agency to coordinate with the state's electric grid operator, ERCOT, on a separate data-center audit, and to report back on its enforcement progress within 30 days.

The TWDB is responsible for developing the state's long-range water plan and relies on annual water-use surveys to track consumption. Survey responses for the 2025 reporting year were due by March 1, 2026, but the Governor says a number of major users — particularly data centers — have not responded.

The stakes for noncompliance are significant: under Texas law, failing to complete the survey is a criminal offense that can be referred to local prosecutors, and noncompliant entities also face disqualification from obtaining or renewing water permits issued by the Texas Commission on Environmental Quality (TCEQ) — a consequence that could stall ongoing operations, development projects, and planned expansions.

This directive doesn't stand alone. It builds on an August 3 order in which the Governor told the Public Utility Commission (PUC) and ERCOT to audit every data center in the grid-interconnection pipeline, requiring detailed disclosures about water use, supply sources, and efficiency measures. TWDB must now partner with those agencies, and any data center that fails to complete the audit faces denial of grid interconnection — a potentially project-ending consequence.

Given the overlapping deadlines and enforcement mechanisms, affected entities should act now. Companies should promptly confirm whether they received and returned the Calendar Year 2025 TWDB survey by March 1, 2026, and should consult counsel about curing overdue responses and mitigating exposure before enforcement begins. Data centers in the ERCOT queue should assemble accurate water-consumption records, supply-source documentation, and information on water-efficient technologies, while all major water users should review internal tracking and reporting systems and confirm compliance before pursuing TCEQ permit applications, amendments, or renewals. More broadly, developers, investors, tenants, and energy-sector participants should build survey and audit compliance into diligence and project-risk reviews, monitor TWDB's initial update expected around October 14, 2026, and track further coordination among TWDB, TCEQ, PUC, and ERCOT.

Gray Reed's GRIDS Initiative is tracking Texas's growing scrutiny of data-center water use and grid interconnection, including TWDB's enforcement rollout and the ERCOT/PUC interconnection audit. The team will follow developments through TWDB's expected October 14 update and the 90th Legislature's convening in January. Those seeking assistance with legislative engagement are welcome to reach out to Adam Leggett, Managing Director of Government Affairs for GRPR.

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